How Do You Spell SHARE DRAFT?
Pronunciation: [ʃˈe͡ə dɹˈaft] (IPA) 
Pronunciation: [ʃˈe͡ə dɹˈaft] (IPA)
A share draft refers to a type of account offered by credit unions that combines the features of a checking account and a share account. In essence, it is a hybrid account that allows members to perform typical check-related transactions while also earning dividends on their deposits.
A share draft account enables credit union members to write checks to make payments or withdraw funds, providing them with a convenient and flexible way to access their money. Additionally, this account allows for deposits, transfers, and other financial transactions typically associated with checking accounts. Share draft accounts often provide members with access to a range of electronic banking services, such as online banking, mobile banking, and ATM usage, further facilitating the management and accessibility of funds.
Unlike traditional checking accounts offered by banks, share draft accounts are offered exclusively by credit unions, which are not-for-profit financial institutions owned by their members. As a result, the dividends earned on funds deposited into share draft accounts are generally higher than the interest rates associated with standard checking accounts. Additionally, credit unions typically offer lower fees and requirements compared to traditional banks, making share draft accounts an attractive banking option for many individuals seeking a combination of convenience, flexibility, and financial benefits.
The term "share draft" originates in the United States and is primarily used in relation to credit unions. The word "draft" in this context refers to a form of payment, specifically a check.
The etymology of the term can be understood by breaking it down into its components: "share" and "draft".
- "Share" refers to the ownership interest that members of a credit union have in the organization. When an individual becomes a member of a credit union, they typically purchase shares, which represent their ownership stake. These shares allow members to participate in the credit union's decision-making process and enjoy various benefits, including access to financial services.
- "Draft" refers to a written order or instruction that directs a bank to pay a specified sum of money from a person's account to another party. In other words, it is a type of negotiable instrument used for transferring funds.
